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2017 Was A Great Year; Here’s How 2018 Could Be Better | Stock News & Stock Market Analysis

Despite all the predictions of doom and gloom made at the beginning of 2017, the country managed to survive and thrive under President Trump.

XIn what everyone else is describing as a year of turmoil, fear and divisiveness, we saw a booming stock market, a strengthening economy, a sharp increase in optimism, strong job growth, major tax cuts, deregulation (as well as the prevention of massive new regulations taking effect), and the destruction of ISIS. None of these would likely have transpired if Hillary Clinton had been president, and if the press weren’t so fiercely opposed to Trump the public might be more aware of these important achievements.

But, as they say, past performance is no guarantee of future success. The new year will hold its own set of challenges, chief among them is keeping the economy going strong. to that end, here’s a brief list of items we’d like to see:

Restraint from the Fed: Jerome Powell in January replaces Fed Chair Janet Yellen. Powell will continue to dismantle remnants of the Fed’s market-distorting quantitative-easing scheme by whittling down the central bank’s nearly $4.5 trillion balance sheet. More importantly, as the economy grows and wages begin to rise following tax reform, we’d hope the Fed chief would keep one sobering statistic in mind: Every recession since World War II has been preceded by the Fed excessively jacking up interest rates to quell inflation, real or imagined. With three rate hikes already planned for this year and even more in 2019, the Fed should think before it acts.

(More) tax reform: We know, tax reform was just passed, right? Yes. But there are still fixes to be done. For one, getting rid of the estate tax entirely is a good idea. Studies show the death tax robs families of businesses, farms and income, while discouraging new business formation. For another, a 1,000-page “tax reform” is not simplification. While as many as half of the 45 million people who now itemize will find their taxes greatly simplified, the tax code’s 70,000-plus pages remain intact. As for filing your taxes on a postcard-sized form? Forget about it. The best reform would be a flat tax. And finally, most of the personal income-tax cuts in the new law phase out over the next decade. Make them permanent.

Control spending, debt: Tax reform is done; how about spending reform? Last year, the budget deficit hit the demonic level of $666 billion on spending of just under $4 trillion. All told, the national debt now exceeds $20 trillion — greater in size than our $18 trillion economy. It’s being driven by the relentless upward rise in spending. One way to control non-entitlement spending, as suggested recently in IBD by columnist Michael Barone, would be to reform the 1974 Congressional Budget and Impoundment Control Act. Before that law, presidents had broad authority to leave unspent those budget items that were considered frivolous, unwise or wasteful. It was effective. After that, Congress controlled nearly all budget authority. Not surprisingly, before that law, the government mostly had balanced budgets; since then, deficits have soared along with debt, and budget disputes have forced federal-government shutdowns 18 separate times.

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No more minimum wage hikes: As the New Year begins, some 18 states and dozens of cities will raise their minimum wages, with many of them seeking eventually to go to $15 an hour or higher. Those who seek these hikes are no doubt sincere in seeking to help those at the bottom. But as repeated studies have shown, minimum wage hikes have damaging career and job effects on those with little education and training, hitting minority youths disproportionately hard. The best thing would be for Congress and the states to have no minimum wage at all.

Repeal the (still failing) ObamaCare: From news accounts, it would seem that ObamaCare is finally on a sure footing. News accounts talked repeatedly about “robust” enrollment in the exchanges for 2018 that “exceeded expectations.” Neither claim is true. Enrollment in the federal exchange declined in each of the past three years — it’s down almost 10% compared with 2016. Meanwhile, skyrocketing ObamaCare premiums — a fixture of the individual insurance market ever since the law went into effect — are driving more and more middle-class families who are ineligible for subsidies to drop coverage. As a result, the ranks of the uninsured are creeping up again, despite big gains in employment. ObamaCare is far from healthy, and Republicans should not give up on their efforts to repeal this disaster and replace it with true free market reforms.

Reform entitlements: In early December, House Speaker Paul Ryan talked about tackling entitlement programs in 2018. “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” he said. Ryan is right that without entitlement reform, the federal budget will never get under control. In the past decade alone, spending on entitlements shot up 48% — after adjusting for inflation. Programs like Social Security, Medicare, Medicaid, ObamaCare and welfare programs now account for almost two thirds of all federal spending. Social Security and Medicare both face insolvency in a few years. Anyone who has looked at federal spending honestly has come to the same conclusion: reform isn’t an option. Unfortunately, Senate Majority Leader Mitch McConnell has already announced that the Senate has no plans to tackle either ObamaCare or entitlements next year.

Fund infrastructure — the right way: Trump says he plans to make infrastructure spending his priority for next year, and he hopes to get Democrats on board. “I really believe infrastructure can be bipartisan,” he said. That much is true. Republicans and Democrats love nothing more than throwing money at infrastructure projects. McConnell, for example, is salivating over the prospect for 2018. But wait a minute, over the past decade the federal government has spent nearly $1 trillion on infrastructure. Yet each year cries go out about crumbling roads and bridges. Where does the money go? Much of it gets wasted. New York, for example, is dumping $12 billion for a 3.5-mile subway connector line. An audit found 200 people were getting paid $1,000 a day for jobs that didn’t exist. If Trump wants to spend another $1 trillion, he can’t throw good taxpayer money after bad. But if he intends to encourage more private sector investment for infrastructure projects by removing bureaucratic roadblocks and cutting needs regulations, we’re all for it. If Democrats won’t sign on to such reforms, so be it.

End flagrant media bias: As we have noted in this space many times, the mainstream press — which fawned over President Obama for eight years — has been on the warpath against Trump. As a result, news outlets consistently fumbled the facts (particularly when it came to Trump and Russia) and ignored big stories (like the defeat of ISIS and the sharp upturn in economic optimism) that might make Trump look good. We don’t expect this to change in 2018, particularly given the mid-term elections, which will determine the rest of Trump’s first term. No doubt the press will do what it can to elect Democratic majorities in the House and Senate, even as it sees its credibility fall further into the basement. We hope the public sees through the bias and keeps pro-growth lawmakers in power.

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